Net Neutrality in India: Our Response to the TRAI Consultation
Web Foundation · April 24, 2015
Today, the Web Foundation has joined over one million others in responding to the Telecoms Regulatory Authority of India’s consultation paper on net neutrality. You can read our full response pasted below this post.
India’s decision on net neutrality matters. Not just for her one billion plus people, but for billions more around the globe. As the first Asian country to grapple seriously with net neutrality, India is also (probably) already home to the second largest number of Internet users on the planet. Now, the country has a critical opportunity to show global leadership on this vital matter. We urge India’s leaders to seize the moment and pass strong net neutrality laws that preserve the Internet as it should be — a neutral, free and open platform for collaboration, innovation and progress. Doing so will bring untold socio-economic benefit to all of her citizens. What’s more, it will show other countries of the Global South that they can balance the challenges of network investment with openness, while still allowing their citizens to benefit from the full power and potential of the Web.
What do you think? Let us know in the comments below, or by email to firstname.lastname@example.org.
Part One: Introduction, Background and Overview
The World Wide Web Foundation (Web Foundation) was established in 2009 by Web inventor Sir Tim Berners-Lee. We believe that the Web is a public good and that access is a basic right. Our work focuses on securing and enhancing the three rights of access, voice and participation. Our team of more than 30 experts comprises around 20 different nationalities (many from the Global South), working from four hubs around the world. We work in close partnership with over 150 organisations to reach into around 60 countries.
The Web Foundation has been a strong defender of net neutrality for many years. We believe that a neutral, non-discriminatory internet is fundamental to economic growth and social progress. Our annual Web Index – a study covering 86 countries – produced the world’s first ever overview of Net Neutrality in 2014.
India is a case study in the power and potential of a free, neutral and open Web. Positive steps in recent years such as Digital India and the Right to Information Act have brought benefits to millions of Indians, while internet penetration rates are rising fast. The current debate over net neutrality and zero-rating will reverberate around the world, and India – estimated to have the second-highest number of internet users in the world – now has a chance to lead the way.
The issues around positive price discrimination, commonly known as “zero-rating”, are complex and debate is hindered by the failure of mobile operators and content providers to release sufficient data on such arrangements. However, when zero-rating is restricted to specific networks, sites or services, we believe that there is a strong risk that this practice will have anti-competitive impacts, stifling innovation and undermining the fundamental principles of openness and freedom that underpin the Web’s ability to act as an engine for socio-economic progress. Note that we are not against the provision of “free data” per se – our opposition is to limiting users of this data to a specific bundle of services – with the decision as to which services will be free determined by he who has the deepest pockets, or the closest links to those putting together the platform in question.
While we recognise that zero-rating can provide an immediate boost in access rates, we believe that the short-term gain is not worth the long-term cost for India. Rather, India should continue to invest in infrastructure and implement policy and regulatory reforms that will make devices and data affordable for all. Alternative policy measures, such as enhancing free public wifi hubs, or providing each citizen with a basic mobile data allowance, are also worthy of consideration. In short, our vision is for “All of the people, to have access to all of the Internet, all of the time”.
Part Two: Responses to Specific Questions
Question Nine: What are your views on net-neutrality in the Indian context? How should the various principles discussed in para 5.47 be dealt with? Please comment with justifications.
The Web Foundation’s view on net neutrality in India is not different from that of its previously expressed views on the same subject in other geographies such as the United States or in the European Union. Namely, we believe that each ‘packet’ of data transmitted on the internet must be treated equally by the entire network, without censorship or prioritisation for any political or business reason. This applies equally to negative measures (blocking or throttling content or services) or positive incentivisation (paid prioritisation of data or zero rating of specific content or services).
Why in net neutrality important? A number of important principles are at stake:
- Article 19 of the Indian Constitution guarantees all citizens of India the right to freedom of speech and expression. This applies online as well as offline. Any restrictions placed on access to platforms of data are tantamount to a restriction of freedom of expression.
- Tampering with net neutrality could undermine the competitive functioning of both the telecoms and content provider markets. Allowing paid prioritisation could lead to cartel type collusion between telcos and OTTs. Zero-rating access to only certain sites is akin to loss leader or predatory pricing in the retail sector – a practice which is outlawed in many countries. Under such practices, although consumers may enjoy a brief period of cheaper goods, the ultimate effect may be to drive smaller players out of the market, which can lead to higher prices and restricted consumer choice in the medium to long term. Both positive and negative traffic discrimination would crowd out innovation, and stifle growth of internet start ups, for which India is rightly so renowned.
It is worth noting here that research commissioned by the Dutch government in June 2013 showed that net neutrality stimulates a virtuous circle between more competition, lower prices, higher connectivity and greater innovation, benefiting all citizens, as well as internet companies large and small. Of course, proliferation of affordable telecom infrastructure is also a must.
The issues around positive price discrimination, commonly known as “zero-rating”, are complex and debate is currently hindered by the failure of mobile operators and content providers to release sufficient data on such arrangements. However, when zero-rating is restricted to specific networks, sites or services, we believe that there is a strong risk that this practice will have anti-competitive impacts, stifling innovation and undermining the fundamental principles of openness and freedom that underpin the Web’s ability to act as an engine for socio-economic progress. Note that we are not against the provision of “free data” per se – our opposition is to limiting users of this data to a specific bundle of services – with the decision as to which services will be free determined by he who has the deepest pockets, or the closest links to those putting together the platform in question.
We recognise and commend India’s efforts to connect all her citizens to the life-changing potential of the Web. However, we believe that alternative policy options to site- or service-specific zero-rating exist, which offer the same benefits without the severe risks. These include:
- A free allowance of mobile data for each citizen, funded through a universal service fund (a practice that is currently being rolled out in neighbouring Sri Lanka)
- Enhanced investment in public wifi access points, anchored around public access facilities such as libraries, hospitals, schools or mixed use entrepreneurial areas, a practice which is an anchor of many national broadband plans, and we note is being pursued in India too.
Question 10: What forms of discrimination or traffic management practices are reasonable and consistent with a pragmatic approach? What should or can be permitted? Please comment with justifications.
Reasonable network management to maintain, protect, and ensure the efficient operation of the network should be carried out under rules that permit only application-agnostic interventions, resulting in as little discrimination as possible. Traffic discrimination based on application-specific criteria should not be permitted.
Application-agnostic traffic management would allow providers to give an end-user customer a larger share of available bandwidth during periods of congestion, if that person has paid for a higher tier of service. It would not allow providers to speed up or throttle a specific application or class of applications (online video, for example).
This is important to ensure the freedom to share, receive and transmit information by any party, unencumbered by political or business ties. It is this openness that makes the Web the powerful engine of economic and social progress it is today.
While it is recognised that there are certain resources such as video streams that consume more bandwidth than others, the Web Foundation does not recommend any toll-boothing or check points across networks.
The solution of course lies in network enhancement. Our response to Q12 considers this option in more detail.
The only case in which immediate application-specific traffic management should be permitted is in that of a genuine national emergency, for which ministerial approval must be sought, with reasons for traffic management publicly and transparently communicated within 24 hours of the decision. Such measures should be strictly temporary in nature.
Q11: Should the TSPs be mandated to publish various traffic management techniques used for different OTT applications? Is this a sufficient condition to ensure transparency and a fair regulatory regime?
Transparency in traffic management is an important complement to substantive net neutrality regulation, but on its own it is not sufficient to prevent providers from discriminating among applications and content.
Disclosure of traffic management practices helps providers differentiate themselves in the marketplace and enables consumers to make better choices, stimulating competition among providers. It also makes the job of the regulator easier, supporting fairer and more effective regulation.
However, transparency alone is not sufficient. Even though better information reduces the information gaps facing consumers, the disincentives to switching remain high and providers may be able to indulge in discriminatory practices without losing too much market share. Experience in the US, Canada and EU shows that after-the-fact disclosure requirements have not prevented such discrimination. Transparency must be accompanied by substantive rules governing traffic management and Quality of Service.
The application-agnostic network management techniques that we advocate in our response to Q10 above allows network providers to charge for different Quality of Service packages. This solution creates an incentive for network providers to degrade the baseline Quality of Service, and therefore requires regulatory agencies to establish, monitor and enforce minimum QoS standards independently of providers’ advertised speeds.
Question 12: How should the conducive and balanced environment be created such that TSPs are able to invest in network infrastructure and CAPs are able to innovate and grow? Who should bear the network upgradation costs? Please comment with justifications.
The Web Foundation believes that the Web should be recognised as a public good and a basic right. In common with utilities such as electricity, the ultimate responsibility for ensuring efficient infrastructure exists to deliver broadband to citizens lies with Government.
Government can take up this mantle by encouraging effective public-private partnerships to invest in infrastructure, developed on an open access basis that encourages sharing between operators. Access to infrastructure should be mandated on a non-discriminatory basis with the needs of the end-user always held paramount. More details on these policy options are available in the Alliance for Affordable Internet’s Affordability Report.
It is important also to note here that some of the arguments in this space are based on a fallacy that TSPs profits will necessarily be eroded as data makes up an increasing share of their revenues. However, as shown by Capital Mind’s analysis of TRAI data, average revenue per user (ARPU) is rising in India. OTT services are driving large increases in data revenue for operators which is more than compensating for falling voice and SMS revenue. From Jun 2013 to Sep 2014, ARPU rose from 111 to 116, a Rs. 5 increase (per month) – and further increases in data revenue are forecast by the operators themselves.
What should be avoided at all costs is any temptation to violate the core principles of net neutrality in order to fund network investment. Allowing paid prioritisation, toll-boothing or check-pointing may ostensibly provide additional resources in the short term for network upgrades. However, in the medium to long term, such policies would stifle grassroots innovation and participation, which would fatally wound the ecosystem. ‘Digital India,’ envisaged by the Honorable Prime Minister of India, Shri Narendra Modi, would only regress in its execution and spirit if the Web is allowed to be controlled, sliced and layered.
Q13: Should TSPs be allowed to implement non-price based discrimination of services? If so, under what circumstances are such practices acceptable? What restrictions, if any, need to be placed so that such measures are not abused? What measures should be adopted to ensure transparency to consumers? Please comment with justifications.
No, TSPs should not be allowed to implement non-price based discrimination of services. Any legal content should be allowed to be accessed freely. Companies providing access to knowledge and content on the web should not be able to block, throttle, or otherwise restrict legal content and services of their users online.
If we do not explicitly outlaw this, we hand immense power to TSPs, ISPs and OTTs. In effect, we take away the power of the people to demand and access the services they choose. Instead, we would allow a small group of closely linked private organisations to decide which content or services to push dependent on what suits their business or political motivations. As Barbara van Schewick of Stanford Law School argues, “Network providers’ decisions about whether, when and how to engage in discrimination will not necessarily result in socially desired outcomes. Network providers are not beneficial stewards of the Internet platform. They are private actors that pursue their private interests. Network providers’ private interests often differ from users’ interests, and even if they do not, network providers do not know what exactly users want. Network providers’ private interests and the public interests with respect to the evolution of the Internet diverge as well.”
Q14: Is there a justification for allowing differential pricing for data access and OTT communication services? If so, what changes need to be brought about in the present tariff and regulatory framework for telecommunication services in the country? Please comment with justifications.
The Web Foundation does not feel well-placed to comment on the intricacies of this issue in the Indian context. However, we submit that globally-accepted best practice is that if consumers purchase data, they should be free to spend it on whatever they choose, with no degradation in service levels. VOIP or data-based messaging services should not be discriminated against simply because they may compete with other services the TSP provides.
 See for instance Barbara van Schewick, “Network Neutrality and Quality of Service: What a Non-Discrimination Rule Should Look Like,” Public Law and Legal Theory Working Paper Series Research Paper No. 2459568; John M. Olin Program in Law and Economics Working Paper Series Paper No. 462; Forthcoming, Stanford Law Review, Volume 67, Issue 1 (2015), http://cyberlaw.stanford.edu/downloads/20120611-NetworkNeutrality.pdf.
 Deepak Shenoy, “Telecom Companies are NOT Losing Money To Data Services: The Net Neutrality Debate,” Capital Minds, April 2015. http://capitalmind.in/2015/04/telecom-companies-are-not-losing-money-to-data-services-the-net-neutrality-debate/
 Van Schewick, op cit, p. 97.